SHIPPING: An Unsustainable Nightmare

SHIPPING: An Unsustainable Nightmare

Ecommerce has a disconnect problem. The ease of pressing “ORDER” is diametrically opposed to the real-world effort that goes on when you transact with a retailer.

In a brief article, Forbes’ Retail’s Future: Open-Air, Curbside, And Data-Driven by Investing writer Greg Petro maps out some of the overlooked, but unavoidable consequences of ecommerce replacing brick-and-mortar retail operations.

Will e-commerce kill bricks-and-mortar? “I think it’s exactly the reverse,” says Adam W. Ifshin, founder and CEO of Elmsford, New York-based DLC Management Corp. DLC owns and/or operates more than 300 shopping center and mall assets. He notes that while Amazon’s net product sales surged in 2020 (36 percent), so did fulfillment costs (45.5 percent).

Any physics student will tell you with certainty that to move an object from A to B requires energy. Lots and lots of energy. And, energy ‘ain’t cheap:

By some estimates, Amazon’s shipping costs are 18.5 percent of net product sales

Ifshin says such a pure e-commerce system is unsustainable and the concept of pick-up in store and curbside, “is here to stay.”

Shipping has always been the ugly fact that no one talks about — until they realize they’re facing bankruptcy. Digital marketers seem to forget that shipping costs a lot. Like a shit ton. So if you’re trying to compete in an open market with razor-thin profit margins, you’ll soon realize that FedEx is eating your lunch. 

Amazon (and others) know this and recognize that it is a prohibitively expensive block for even large retailers. So multiple hybrid “solutions” are attempted; Amazon Locker, their horribly executed alliance with Kohl’s, and start up “return services.” It’s with a small smile that I’ve read that Amazon is quietly opening its own physical shops

What has been your experience with managing shipping and return policies? Leave a comment below.

COVID Pushes Ecomm Over the Top

COVID Pushes Ecomm Over the Top

Societies do not change gracefully. Behind major shifts in how humans go about their days often stand unspeakably horrid events: war, plague, famine, flood.

When the shit hits the fan, we deploy all of our technologies to mitigate the disaster. Medically, that translates into vaccines and healthcare systems. In times of natural disaster, we call up the engineers and first-responders.

The current crisis has forced us to shift as a planet in multiple ways. One of the most prominent economic shifts is in consumer behavior. The changes are significant, real and much more substantial than we think.

Are These Numbers For Real?

It’s a black ribbon medal, for sure. But ecommerce has arrived. No longer an oddity or an alternate, it is now required to be online, either as a consumer or a retailer. This one graph pretty well sums it up:

cgk.ink | ecommerce growth

That’s impressive growth on any level. But the percentage increases become ridiculously large when you start looking at a few industries. Obviously, we know the losers (aviation, hospitality, etc.) but there are some surprising winners. Chiefly among them is an industry I focus on a lot: Print on Demand (PoD).

“It was almost a straight line up when people were scrambling to shift from traditional production to on-demand,” says Brian Rainey, CEO of Gooten, a print-on-demand logistics and fulfillment company. “We saw an enormous spike in Q2, and it continued in Q3 and Q4. On-demand manufacturing and mass customization is growing faster than anyone can keep up with.”

Printful, another on-demand fulfillment company that prints, packs and ships custom products from e-commerce sites, reported an 80% year-over-year increase in order count over the last three quarters of 2020 and a 44% year-over-year growth in the number of new stores joining the platform. During the holiday shopping bonanza between Black Friday and Cyber Monday, the online printing and drop-shipping company fulfilled 25 million products. In fact, that weekend, Printful saw a 70% order increase, with as many as 204 orders per minute – twice as high as in 2019.

(Sources)

The Future: More of the Same

“I don’t think anything will revert back to the way it was before,” says Rob Watson, chief experience officer at Top 40 supplier Vantage Apparel (asi/93390), which offers its own home-grown on-demand customization service to distributors. “More distributors are getting into the space and offering a solution that end-users wanted before but never knew that distributors could offer. I don’t think this is going to go away.”

Don’t expect 2021 to rewrite the narrative for on-demand companies and promotional products firms that follow the same model – 2020 wasn’t a blip. It was merely an acceleration of what’s already been happening. Consider that Printful’s impressive numbers during the holiday shopping weekend came after an already staggering growth rate for the company, which ballooned by 441% over the three previous years – from $21 million in 2016 to $116 million in 2019.

Related article: U.S. Ecommerce Up 92.7%

Robots Deliver, No Mask Needed

Robots Deliver, No Mask Needed

Fulfillment warehouse robots are having a moment as online shopping continues to increase during the pandemic. The hot market for autonomous fulfillment solutions has helped Locus Robotics, which makes autonomous mobile robots for use in fulfillment warehouses, raise an additional $40 million during a successful Series D this week.

“Automation has proven to be a critical solution for retail and third-party logistics businesses during this challenging time,” says Tony Palcheck, Senior Director, Zebra Ventures, which led Locus’ Series D. “As the retail industry continues to shift to e-commerce, Locus Robotics’ warehouse automation will help businesses meet the demands of this ‘new normal,’ ensuring that customers can increase operational efficiency to meet requirements for fast, accurate delivery.”

Locus Robotics makes autonomous mobile robots that operate collaboratively with human workers to improve piece-handling productivity as much as 2X-3X, with less labor compared to traditional picking systems. The robots are aimed at helping 3PLs and specialty warehouses efficiently meet the increasingly complex and demanding requirements of fulfillment environments, which now include social distancing restrictions — something robots don’t have to worry about.

“We have recently seen a dramatic disruption of retail with e-commerce growth as high as 400% year-over-year in some categories. And others were severely limited as the bulk of their inventory was in stores that they could not get into due to lockdowns. It’s critical that retailers are prepared for direct fulfillment from the warehouse,” said Greg Buzek, President of IHL Group. “This announcement underscores the need for companies to prepare for today’s new labor challenges that will be impacted by the significant volume increases that are already occurring. Companies investing now in warehouse automation, particularly AMRs, will be better positioned for success in the post-pandemic economy as they can support sales from any channel.”

SOURCE:ZDNet.com

Shipping and the Messy Part About Returns

Shipping and the Messy Part About Returns

Sending Things.

I have a security guard in my apartment who spends the better part of the day playing postman. My building has roughly 300 residents. So the poor guy’s logging in, storing, distributing, and verifying hundreds of packages and getting to know all of us. Everyday. This must suck for him.

This post isn’t an opinion like the others. I’m not here to resolve/blame/shame anything or anyone. Instead, I want to focus on an aspect of ecommerce that is critical: shipping.

Salesforce recently predicted the value of holiday returns this year to top $280 billion, an amount equivalent to the GDP of Finland.

The returns from online shopping last year created 5 billion tons of landfill waste and produced as much carbon dioxide as from 3 million cars driving for one year, according to Optoro, a tech company that manages retailers’ returned items.

The process of sending back unwanted items and potentially re-selling them results in 10 billion unnecessary transportation trips every year.

It’s Expensive

It’s often overlooked when planning an ecommerce site. It can eat up to 30% of your profit. It requires staff and customer service ’cause things will go wrong every f’ing day. And, if you’re not, say Amazon or Target or Walmart, you’re paying insanely higher prices than they are

It is Incredibly Confusing

Even if you are Amazon or a super-shipper, things don’t get easier:

Many parcel delivery services have struggled with the surge in demand for shipments and have began imposing measures to deal with the influx. Other shipping services such as FedEx (FDX) and USPS have increased their pricing premiums for the holidays and hired thousands of temporary workers to handle shipments.
UPS says it added 20 new facilities and 14 additional aircraft for the peak season. It also expanded its weekend operations and the speed of its ground delivery.
Meanwhile, Amazon (AMZN), one of the country’s largest retailers, has skated ahead without much shipping troubles thanks to relying on its own delivery service and drivers to accommodate its slew of shipments. This past weekend, Amazon reported bringing in nearly $5 billion between Black Friday and Cyber Monday, a 60% increase from last year.
 
— CNN’s Jordan Valinksy contributed to this report.

It Creates Major Inefficiencies

Overall, about 10% of all purchases are returned, according to industry estimates. But items bought online are three times more likely to be returned than those bought in-store. For some categories of clothing think shoes and women’s jeans  more than half of online purchases are returned.

 

Buy Now! We Mean It!:

The “buy now, choose later” online shopping approach was common even before the pandemic hit. But now, more shoppers do it than don’t, according to some research.

A survey from shipping and logistics company Narvar, which counts 800 retailers as clients, found that nearly two-thirds of shoppers this year bought multiple sizes or colors of the same item, with the intention of returning some of the items. Buyers of luxury goods, as well as shoppers under 30, were most likely to use this practice, known in industry parlance as “bracketing.”

“Consumers were already in the habit of using their bedrooms as fitting rooms for online purchases, but the practice skyrocketed this year,” Narvar found.

It’s Not Them, It’s You (Kinda)

So, there’s this massive shipping network carry to — and from consumers who, ya know, like the convenience and the pretty pictures. And I have no clue how humans can deliver something to my home at warp speed. But they do it. And it is emerging as a significant environmental danger:

The ease of returns is a major ecommerce selling point. Ecologically, it’s pretty ugly.

“Unfortunately we’re going to see more and more of an increase in returns. That has not slowed down,” said Narvar CEO Amit Sharma.

The more shoppers buy, the more they return. The reverse is also true: a generous return policy makes shoppers more likely to buy from a website. That’s why, despite the losses that returns represent, companies are loath to tighten free-return policies lest they drive away shoppers.

“It’s now a consumer expectation,” said Sharma. “It’s table stakes.”

Quarantine & Ecommerce

Quarantine & Ecommerce

Quarantine does have its advantages.

Dressing up means wearing pants. You now have a rock-solid excuse to not speak to your shitty neighbor. Groceries are delivered and you never even have to face the delivery person (who is definitely shaming you in their head for the case of Pop-Tarts). The Vodka & Valium Flavor. Your dog is asking “don’t you work?”

If you live in my grand city of Los Angeles, we’re at the beginning of a torturous plague that is infecting thousands per day. You can’t get a drink anywhere and “fine dining” means not-the-paper plates. Economically, we’re facing the prospect of not having one.

I’m watching closely how this is impacting us, and particularly how we behave as consumers. If I were to fully comply with California’s guidelines, I would have no toilet paper, food, water and my dog would have definitely left me for greener pastures. It seems, that the entire country is “just making it through.” And I totes get it.

 

RELATED: U.S. Ecommerce Up 92.7%

The Change is Permanent

This isn’t happening automatically. There has been a fundamental shift in e-commerce and the signs are just beginning to show. McKinsey & Company has a fairly good read with “The great consumer shift: Ten charts that show how US shopping behavior is changing

Not to put too fine a point on it, but there is this:

Black Friday shopping in stores craters 52% during the pandemic as e-commerce sales surge.

  • Traffic at stores on Black Friday fell by 52.1% compared with last year, according to preliminary data from Sensormatic Solutions.
  • “Shoppers are spreading out their shopping throughout the holiday season because of concerns about social distancing and the pandemic,” said Brian Field.
  • Online spending on Black Friday surged 21.6% to hit a new record, according to data from Adobe Analytics.

CNBC, again

It is a perfect confluence. Isolation + Fear = Online Shopping. And boy, did it take off. With roughly nine months of experiencing the cataclysm that is COVID-19, The data is astounding:

  • Holiday shoppers spent $10.8 billion on Cyber Monday, up 15.1% from a year ago, setting a record for the largest U.S. online shopping day ever, according to Adobe.
  • That came in short of Adobe’s original forecast of $12.7 billion in spending.
  • Adobe cut its online sales forecast for the entire holiday season to $184 billion, which is a 30% increase from last year.
  • Shoppers started their gift-buying earlier than ever, as retailers promoted deals in October.

CNBC

Curate or Die

Curate or Die

We’re cultural slobs.

Our propensity for swallowing, huge, shit-loads of pop crap is astounding. Yes, please, I would like some promo for a shitty movie with my McDonald’s meal. We don’t think twice about what we consume. Or how we behave… O, the list goes on. Personally, I blame Blackberry, but that’s me.

Critical thought lags behind Instagram (stress the “insta”), Google and Facebook. Where am I? What am I doing? What do I like? All these perplexing problems have been solved for you by algorithms (which is not AI).

Make a Damn Choice

Curation puts a check on these modern ill-thought-out behaviors. Curation is defined by Google (I know) as:

cu·ra·tion
/kyəˈrāSHən/
noun
noun: curation; plural noun: curations
  1. the action or process of selecting, organizing, and looking after the items in a collection or exhibition.
    “the curation of the exhibition was informed by my experience as an artist”
    • the selection of performers or performances that will feature in an arts event or program.
      “I had a chance to talk with a fellow musician about the festival’s curation”
    • the selection, organization, and presentation of online content, merchandise, information, etc., typically using professional or expert knowledge.
      “curation of online content that is relevant to your business can be an excellent way to drive SEO”

An article in Forbes caught my eye. Yes, you’ll have to jump through some hoops and give up your personal data to access it (fuckers) but here it is and it’s all about Target.

Today, eMarketer reported that Target has surpassed three competitors to become the eighth-largest retailer in the U.S. in terms of e-commerce sales, up from 11th place just one year ago. 

Very impressive. But not quite good enough in terms of technology-business Darwinism.

 

COMPETITION?

So how does one compete? Does one even have to compete? Evidently, we are tooled to dominate. But is this the healthiest thing, business-wise? Remember, companies only exist to serve people, not the other way around.

CRITICAL THOUGHT, PART DEUX

I’m really good at some things. Like design and content and eating doughnuts with coffee. Total pro. I totally suck at most other things, basic things, like bagging groceries or balancing a bank account or laundry. This is why I turn to people who know a shit-ton more than I do about these things.

Enter: Target’s brilliant strategy. 

OMNIBUS vs. MONOBUS

Target’s e-commerce marketplace (known as Target+ or Target Plus) assortment is highly curated, as opposed to Walmart and certainly to Amazon. 

You are not Amazon. You never have been and are not now and will never be. It’s a freak of nature and an anomaly and an abusive, weird oligarchy that also shoots shit into space and builds clocks that will outlive us all. Just… deep breath. Because I’m OK and you’re OK. We don’t have to do that whole “Masters of the Universe” thing cause it ended really badly in the 90s, right?

RIGHT AND TIGHT

Target has gotten the message and has ran with it:

Target can avoid some of the negative consequences of Amazon’s burgeoning marketplace, chiefly counterfeit products, gray-market inventory sold by third parties which creates headaches for brand owners, and fake product reviews. Amazon shoppers also face an avalanche of brandless products when searching across many product categories like bluetooth headphones, pajamas, and fish oil supplements. (For further reading, see this great New York Times piece.) While you’d imagine that the overabundance of options might cause many shoppers to abandon their searches, Amazon continues to power on—acquiring more market share every year. 

Target+ could also attract the same brands who have shunned Amazon in recent years due to concerns with counterfeiting and unauthorized resellers.  

  • 60 active sellers on Target+
  • 36,754 sellers on Walmart.com
  • 1,010,695 active sellers on Amazon.com

FOCUS LIKE A FUCKING LASER

Do not try to be all things to all people. See: Corinthians. Sorry, I got biblical. Look at what you do and what you do well. Discard the stuff that doesn’t achieve that goal; they are distractions. Limited resources = limited marketing. Do you like cats? Go for it and make it sing. You don’t see that site also selling detergent or dry cleaning, do you? No. No, you do not. Learn.

The most successful small- to mid-sized online retailers have a focus. I’m not talking about bullshit mission statements or slogans. I’m talking about doing one thing and doing it well.

What’s your focus? 

Let’s talk.

 

Porn + Food = Ecommerce

Porn + Food = Ecommerce

I ran across an interesting article on the BBC “Worklife” page titled: “The curious origins of online shopping.”

If you were an early adapter, you might remember the thrill of upgrading from a 14.4K modem to 28.8K. Was that speed even possible back then? Soon, a mind-blowing 56K would be available and that was pure, straight-up science fiction at that point.

 

Right then, the first group of large-scale online services began to take shape. These were almost entirely social-based experiments. Prodigy, AOL, Compuserve, these were attempting to figure out not only the “how” but the “why.” What did they provide besides a way to chat and email and lookup phone numbers? One company, Amazon, had the foresight to begin the very first models of e-commerce. The market matured and slowly, this weird concept of buying products via computer started to put down some roots.

Online bookstore and IPO

After reading a report about the future of the Internet that projected annual web commerce growth at 2,300%, Bezos created a list of 20 products that could be marketed online. He narrowed the list to what he felt were the five most promising products, which included: compact discs, computer hardware, computer software, videos, and books. Bezos finally decided that his new business would sell books online, because of the large worldwide demand for literature, the low unit price for books, and the huge number of titles available in print.[9] Amazon was founded in the garage of Bezos’ rented home in Bellevue, Washington.[7][10][11] Bezos’ parents invested almost $250,000 in the start-up.[12]

SOURCE: Wikipedia

The Porn Paradigm

I firmly believe that the impetus for users to go online was porn. It was the perfect match between content and delivery. It was prurient but discrete; enticing and easy. Likewise, Amazon chose a similarly (if not less carnal) product to marry to this new form distribution: books. They were easy to ship, they were easily identified and sorted digitally since they were already assigned an ISBN # and, perhaps most importantly, they did not need to be personally inspected like, say, a pair of pants.

It often takes a tectonic social shift to see if a trend becomes a more permanent feature of any large, diverse community. And we are at that moment right now. One could not create a more telling stress test for e-commerce than COVID-19. And the preliminary statistics show it:

Between March 2020 and April 2020 in the US, ecommerce sales jumped 49%, led by online grocery with a 110% boost in daily sales. Kahn says that ecommerce has finally reached the kind of high penetration (the kind that makes more sense relative to its age) because people have turned to the internet to buy food.

— Source: BBC

These numbers are astonishing in any environment. The rate of acceptance of previously brink-and-mortar-only retail drives an entirely new type of ecommerce. We are now shopping for survival, not for fun.

“A real inflection point for online shopping as we know it today could be traced to around 2017. By the end of the prior year, many Americans were “starting to shop online as often as [they] take out the trash”; according to the Pew Research Center, eight in 10 Americans used a computer or phone to buy something online that year – as opposed to the just 22% who did so in 2000.”

— Source: BBC

EARLY, BUT DEAD, PIONEERS in ECOMMERCE

(my hat’s off to them)

Fast Destruct Fashion

Fast Destruct Fashion

I’ve written quite a bit about fast fashion. That’s apparel produced in weeks, shipped, and sold before the season even begins. It’s what we count on at Zara, H&M, Target, Walmart. It is simple, inexpensive but high in quantity (not quality) and it makes a ton of money.

It also is incredibly ecologically damaging in so many ways; it can bankrupt nations and cause unnecessary deaths. Not pretty. To put this into perspective:

  • Producing a pair of jeans consumes even more water — around 3,000 liters — due to the dyeing and bleaching involved, according to calculations by Quantis.
  • Making a single pair of jeans emits around 20 kg of CO2, the same amount produced during a 49-mile car journey.
  • The industry is responsible for high carbon emissions, wastewater production, and large amounts of landfill waste.
  • Fast fashion is second only to oil as the world’s largest polluter.

The fast fashion industry produces ~1 billion garments annually.

Profits are around 3 trillion dollars per year. What impact does this large amount of production have on our environment? Production at this scale is pushing our natural systems to the absolute limit.

The fast fashion industry emits 1.2 billion tons of CO2 equivalent per year.

This is about 5% of global emissions. That’s more than the emissions created by air travel and international shipping.

In 2015, the fast fashion industry used 80 billion cubic metres of freshwater.

The industry is one of the largest consumers of freshwater on the planet. To put this in perspective 80 billion cubic metres is enough to fill about 32,000 Olympic size swimming pools.

Production of textiles uses about 3500 different chemicals.

The industry uses chemicals to produce, dye, coat, and soften fabrics. Many of these chemicals are harmful to humans and the environment. Through wastewater, chemicals used to produce clothing often end up in our waterways and oceans.

Cotton is one of the most resource-intensive crops out there.

In comparison to synthetic materials cotton may not actually be better for the planet. This crop uses large quantities of pesticides and fertilizers. Globally, we use about 11% of pesticides and 24% of insecticides on cotton crops. Currently, less than 1% of cotton crops are organic. On top of this cotton requires an enormous amount of water.

The above comes from an excellent source:

Fast Fashion Facts: What you need to know

from 7Billion for 7Seas.com

I rely heavily on Print-on-Demand companies like Printify and Printful. So I becoming increasingly concerned that I am becoming part of the problem and not helping the issue

 

This company has a pretty smart response (and they’re cute, too! BONUS!)

U.S. Ecommerce Up 92.7%

U.S. Ecommerce Up 92.7%

  • U.S. e-commerce sales jumped by 92.7% in May, according to a new SpendingPulse report from Mastercard. In April and May, consumers spent more than $53 billion via e-commerce in the U.S.
  • Mastercard’s research also found that hardware sales and furniture sales increased in May. Year over year, online and in-store hardware sales rose by 36.2% in May, and furniture sales went up by 7.5%, per the report. 
  • U.S. grocery sales increased by 9.2% year over year in May online and in-store, which Mastercard noted as the strongest grocery sales volume for the month of May in SpendingPulse history.
 

Insight:

E-commerce, which has come to the forefront for retailers during the COVID-19 pandemic, is a bright spot in otherwise trying times for brands. While some nonessential retailers like GameStop have seen an e-commerce boost during the pandemic, others, like Zara, are rethinking their store footprint and closing locations in order to focus on digital sales. 

Mastercard’s research found that e-commerce sales in April and May comprised 22% of all retail sales, double last year’s 11%. A recent eMarketer projection anticipates that U.S. retail sales will drop by 10.5% in 2020 overall, but e-commerce sales could see an 18% bump. 

Echoing forecasts from analysts at Wedbush and Morgan Stanley, eMarketer’s latest report doesn’t point to digital sales making up for the losses of brick-and-mortar store closures. As online sales rise, the constraints of e-commerce are coming to the forefront, especially returns and supply chain snags. It’s not clear how much consumer shopping behaviors will change, maybe permanently, because of the pandemic.

“The shift to digital ways of shopping has been undeniable, while everything else has been incredibly unpredictable,” Steve Sadove, Mastercard senior advisor, said in a statement. “The question is what changes will stick around for the long-term. Investing in your home and shopping local are two recent trends. Heightened demand for touchless services is another, which could have tremendous impact on what stores actually look like and how they blend their online and brick and mortar footprints.”

— Source

New Payment Options

New Payment Options

Online payment methods have seen tremendous growth over the past couple of years.

The standard, PayPal, has dominated the ecommerce payment market for years (1999 to be exact). It is, by far, the most widely used payment service.
But there are several competing services recently which both advance and confuse consumers’ choices. We’ll take a look at two of the more advanced options here: Venmo and Zelle:

Venmo

Venmo is actually PayPal under a different name. It’s focus is on mobile payments with a social feature that can disclose who paid who (without the amount). After several lawsuits, users can opt out of that feature.
The key focus of Venmo is to make splitting payments among friends easier (dinner, rent, groceries, etc.) and not as a robust business processor. This is changing rapidly as they have begun to allow certain merchants to accept it as a form of payment. The integration with ecommerce platforms is problematic because of this and requires that the merchant also accept PayPal. There some clunky work-arounds, including the use of QR codes. Be aware that Venmo is restricted to US accounts. (Source)

Zelle

This one’s a lot more complicated. In essence, Zelle was created by major banks as a way to transfer funds quickly. Wire transfers are expensive and slow. Zelle allows almost instant deposits into your existing bank account.
Zelle is bank-centric, meaning, it’s not an app per se (although there is one) but a service and is made available through your existing checking account. In other words, you use Zelle through your bank directly. Money received does not go into a seperate, Zelle-branded account which then needs to be transferred.
The pros are that it’s absolutely free and it’s nearly instant.
The cons are that it’s composed of over 400 banking institutions who can impose any type of regulation or fee they see fit. I’ve personally ran into situations where a business account could not be used to either send or receive money (sometimes). Most smaller banks are open to using Zelle, but smaller, regional banks may not be.
Zelle’s stance on ecommerce is a little unclear. If both you (the merchant) and your consumer are already using Zelle, then it’s just an issue of requesting money and getting paid. However, if your an ecommerce merchant, it gets complicated. There’s an application, forms, tax records,and even then, you’ll need to also get a Braintree account (which is owned by PayPal!) for some reason that confuses me. Read more at: zellepay.com

Choices

As an ecommerce developer, I find that integrating either of these payment options is prohibitively complicated. I’ve integrated a few work arounds on my site and I’ll report back with how it goes. I also see an incredible opportunity here to challenge the near-monopoly that is PayPal. Other processors, like Google Pay, Apple Pay, Square, etc. are also actively developing new tech and services that will keep this marketplace fluid.

cgk.ink understands how important choosing the right merchant account is to your online business. Let’s discuss what’s most important to you:

12 + 3 =

Shopify, Drop Shipping and You.

Shopify, Drop Shipping and You.

Drop-shipping is not necessarily an evil thing.

 

But it is a hell of a lot of problematic to base a business on.

 

Drop shipping is, in a nutshell, a really shitty proposition. It goes something like this:

You find a supplier in Asia (usually China) who makes consumer products for pennies on the dollar. And of course the quality is sub par, but heh, you have dreams of sitting on the beach collecting money while you nap. You come up with a snappy site and sell these items that are shipped on your behalf by your Asian business partners.

It sounds good. No inventory costs, automatically calculated bulk shipping rates and a huge markup.

Then there are the bad parts: complete lack of quality control, no shipping expedition and your Chinese “business partner” is mass producing these items, whatever they are, which leaves you with a hyper competitive ecommerce situation.

All this was reiterated to me in a recent SeekingAlpha.com article. The publication is a totally nerdy geek journal that worries about the details in this digital economy that I ignore. The article dives deep into one platform’s (Shopify) seemingly disturbing over-reliance on drop ship clients.

Source: Pagely.com

If your unaware, Shopify is a great Canadian company that has created an ecommerce platform that allows inexperienced developers easy entry into ecommerce. I’ve used them for years and do not have one bad word to say about them. And their product is actually very good — well thought out, scalable and fairly transparent. And the market has responded by awarding them approximately 20% of the ecommerce platform market share, which is pretty damn good. The problems start to arise when you realize Shopify’s reliance on drop shippers leave them with a very vulnerable population who will, in most cases fail miserably, thus leaving them with no customers 🙁

At the same time, there are persistent questions about the company’s disclosures on user numbers, its lack of disclosure on customer churn, and the apparent reliance of the business on ‘drop-shippers’ – Shopify stores which simply re-sell cheap Chinese merchandise, ordered directly from Aliexpress – at huge mark-ups – a practice which appears to be not only endorsed, but encouraged by SHOP.

These questions have been around for a while – and we are not accusing SHOP of fraud – but if it is the case that a material percentage of SHOP’s clients are this kind of business, then the sustainability of the growth rate, and perhaps of the entire business could well be threatened.

781% MARK UP?

One of the more scummy things about drop shipping is abusive mark-ups.

By all means, you deserve to earn a profit to cover your efforts. But 781% is not only scandalous, it’s idiotic.

If you had, say, created these items by hand and made 10 of them, their value would approach a markup of say 100%. But theser are being made by the millions — and are being brought for the same wholesale by your competitors.

In short, you not only look like a profteer, you look like an aggressive idiot.

The article goes into depth of some very daunting accounting processes — required since Shopify will not release its numbers — which shows the truly horrible truth of drop shipping:

(…) this suggests that the average store on SHOP, using generous assumptions, is generating less gross profit that would be necessary to support even a single worker at the Federal minimum wage. 

This wouldn’t be necessarily alarming, but, there is a very well-orchestrated campaign that markets to people with false claims of the revenue that drop shipping can generate:

(…) the pushing of drop-shipping as a kind of “get rich quick scheme” on YouTube is alive and well.

Source: Youtube.com

Worse than this, many of these video-makers are attempting to sell training or coaching services on the back of this “drop-shipping opportunity”.

Source: Youtube.com

Source: theecomclubhouse.com

There are way to do this correctlly and make a decent income by being realistic. I’ll explore that in my next post.

Warehoused

Warehoused

There’s something deeply disturbing whenever one uses the word “warehouse” as a verb. Especially when the objects are human.

This John Oliver piece makes me think twice when reveling in the fact that my order arrives almost before I placed it. Why yes, how did you know, Amazon, that I needed coconut coir planting material and a squishy baby head that is surprisingly creepy?

Print-on-Demand Custom Orders

Print-on-Demand Custom Orders

The flexibility of print-on-demand (PoD) allows opportunities that have not previously been possible at scale. 

cgk.ink presents a lot of high-quality products quickly. We can do this because we have partnered with Printify to create our designs using their technology. This opens up the creative process enormously. And we want you to be a part of it.

Print-on-demand (PoD) uses various techniques to take digital images and transfer them to products with absolute precision in scale, color and sharpness. Indeed, the entire world becomes your canvas. We’ve selected to curate collections of images that make us smile, or laugh, or think. Our range is wide, but limited since we’re a small crew. We’re looking to expand!

We’d love to help you create the item of your desire. 

For example, let’s say that you’re into robots. Who isn’t? So we did a quick Google Image search and found this little guy:

Cute, right?

NOTE: always respect copyrights and don’t steal. Or you’d be a bad robot. There are tons of places online to find rights-free images -or- you can create them yourself:)

OK, so we have our raw material. Now what? Well, it’s a somewhat simple process with lots of cautions and considerations. Essentially, what happens is:

Prepare Your Design:

Things to consider are file type and size, aspect ratio, transparency, and resolution. Of course, make sure you have permission to use the image or design!

Select Your Medium:

Is this going to print on a garment? A poster? Underwear or a shower curtain? Make sure the design is appropriate for the media.

Edit Your Product:

This is where you position, crop and otherwise play with your design on the selected medium. Not all images scale to all products, so be judicious.

Publish Your Work:

Once everything looks good-to-go, it’s a simple matter of pricing and uploading to Printify’s servers. You can choose to go live immediately or do a second inspection on your ecommerce platform.

Sell Your Product:

You’ve already linked your ecommerce platform to Printify, so all the details, images, pricing and shipping are automatically added.

There’s a lot more detail to this process than I’m revealing, but the concept is solid. 

cgk.ink has lots of experience in designing, editing and preparing images and designs that play nicely with Printify’s requirements.

If you have an idea of an image or design that you’d like to see on almost any garment, houseware, decor or accessory, let’s start that conversation below! We’d love to work with you!

9 + 7 =

Ecommerce Hits Milestone in 2018

Ecommerce Hits Milestone in 2018

Ecommerce has inched closer to displacing traditional retailers from their historical dominance.

From our buddies at Statista, this chart shows the incessant growth of ecommerce over the past several years and is updated to reflect the most recent data available (2018). While the rise of ecommerce is consistent, it has not completely wiped out traditional retail, although it’s a fairly even 50/50 split:

Numbers can be Deceiving

When taken as a whole, the retail sector has not been conquered by robot overlords:

Despite the latest milestone, e-commerce sales still account for no more than roughly 10 percent of total retail sales in the United States, illustrating that the “Retail Apocalypse” isn’t as close as some might think. 

(Source: Statista)

Hands on Ecommerce: 101

Hands on Ecommerce: 101

I write a lot about ecommerce and, indeed, working on ecommerce sites is the bulk of my business. [caption id="attachment_2282" align="alignnone" width="1024"]cgk.ink | STORE Select STORE from the top menu to begin.[/caption] So I thought it was time to demonstrate my skills in real, live, concrete ways. I’ve decided to create the cgk.ink store as a sort of teaching tool so that you can see the mechanizations and processes behind running an effective online retail store yourself. I plan on using this as a workshop of sorts where I put into play a lot of the things I talk about in concrete ways. This is a fully functioning ecommerce site and the products are very real — as will be the charge to your card if you decide to buy. Wherever you see  means that there is a pop up that explains in more detail exactly what that component does, why it’s there and resources to explore. The first installment is all about a rapidly growing type of ecommerce that is akin to drop shipping but with a twist: Direct to Garment (DTG) print fulfillment. Companies like Printify, Printful, Art in America, etc. have been around for a while. Essentially the process works like this:

  1. You select an image or design
  2. You transmit that to the selected company
  3. They take a blank item (T-shirt, plate, mug — the product list grows every day) and using their own machinery imprint the design on the item which someone has selected on your customer-facing web site.
  4. You enjoy the fact that there are no upfront costs, no inventory to keep and the printer ships and fulfills the item directly to your customer.
  5. You collect the profit which is your retail price – the manufacturer’s cost.
Sounds pretty simple. And it is, but there are several concerns to address as well as unique marketing opportunities. Which images work best? How do you optimize an image that is being displayed in a different medium? How do you price your item? Let’s explore our first steps together.]]>

BASTA

BASTA

Yeah, so it’s the beginning of 2019. RELEASE THE PR BULLSHIT! It’s inevitable and a weird thing that we’re compelled to witness: End of Year Lists + Top 10 = crap. Here’s the latest: Adweek (which is, by its nature, weak) published this piece of shit:

WHY?

So the authors think that self-driving cars bringing you groceries is exciting? Or that pop-up stores are something to notice? Please, girls. I live in DTLA and these “pop-up” shops are so very 2017. Please, catch up. Pop-Up shops (which automatically install a sense of impermanence and volatility) have these things in common:
  1. Make it difficult to get my groceries home. I had a rough day. Just please stop lining up in front of the entrance to my loft, OK?
  2. Are bullshit and charge more than what I can find online. 100% of the time.
  3. Are so enamored by touchscreens that it’s embarrassing. Don’t mimic Apple. It’s boring and homogenous. Y’all need some funk.
  4. The hired models have no clue (see: Brand Ambassador, if that’s a thing).
  5. Do not serve good cocktails.
  6. Any conflict or dispute can be disregarded, since, ya know, they’re temporal. It’s like quantum physics but with money.
  7. Also, no hosted bar.
I am saturated by ecommerce’s latest, biggest, best, etc. Have you seen Amazon lately? EVERYWHERE? It’s a bad Netflix Original starring YOU. AND YOUR DATA. AND YOUR ALEXA! As an aside, has ANYONE tried to buy shit from their Alexa? Listen, ecommerce does need to play by the same, brutal rules as traditional commerce. I’m tired of the free blowjob PR in established publications. This contains my contempt in one bullet point:

I have a bad taste in my mouth.

In perhaps a sign of the times we live in, both Amazon and Walmart found themselves in hot water after third-party sellers listed products advocating slavery and impeachment. Both instances inspired outrage and prompted the retailers to pull merchandise. Clothing retailer H&M also made a grave error when it modeled a black child in a sweatshirt reading, “Coolest Monkey in the Jungle.” It later apologized and removed the product. AdWeek
Have you heard of AdBusters? No? Try the link. cgk.ink cuts through this bullshit in actionable, achievable goals. Let’s continue the conversation.]]>